BANK Negara Malaysia (BNM) has cut its overnight policy rate (OPR) by 25 basis points (bps) to 1.75%.
The ceiling and floor rates for the OPR have been reduced to 2% and 1.5% respectively, the central bank said in a statement today.
BNM said that the reduction in the OPR will help provide additional policy stimulus to boost the pace of economic recovery during the current weak global economy.
“The impact of Covid-19 on the global economy is severe. Global economic conditions remain weak with global growth projected to be negative for the year.
“Although a trough is expected in the second quarter, broad-based weakness in labour markets and precautionary behaviour by households and businesses could affect the recovery going forward,” BNM said.
This marks BNM’s fourth OPR cut since Jan 22, 2020. With this latest cut, the OPR has been reduced by a total of 125bps so far this year.
The central bank also expects inflationary pressures to be muted in 2020, and that average headline inflation is likely to be negative this year, due to the lower global oil prices. – July 7, 2020